ERP Implementation: Significance of Upper Management Engagements

The intricacy with SaaS based ERPs you can buy online is that it doesn’t tackle all the issues and challenges a business faces since there is little or zero interaction between client and those providers.?

Selection of implementation methodology constitutes an important component of implementation strategy. One of the more popular implementation methodology is “big bang” approach where on a scheduled cut-off date; entire system is installed throughout the organisation. All users move to the new system and manual / legacy systems are discontinued. The implementation is swift and price tag is lesser than a phased implementation. On the flip side, risk element is much higher and resources for training, testing and hand holding are needed at a much higher level, albeit for a shorter period of time.

Another major implementation strategy is “phased implementation”, where roll out is done over a period. This method is less focused, prolonged and necessitates maintenance of legacy system over a period of time. But, phased implementation is less risky, provides time for user’s acquaintance and fall back scenarios are less complicated.?

Implementation phases:

• Project kick off:?Project goal, project team and communication standards are agreed upon. A number of workshops are held where project scope, sponsors commitment, project risk, milestones and deliverables are discussed. A SWOT (strength, weakness, opportunities and threat) analysis is carried out with active participation of all.
• Process identification and data gathering:?“As is” processes are assembled through flow charts. Current practice of interfacing with business partners is gathered. Bottlenecks, delays, complexity, internal blame games, idle assets etc. are brought forward. Use of existing technologies is comprehended. Major and strategic business processes to be reengineered, are identified. Stakeholders categorise the processes to be reengineered and agreed upon on the timeline of implementation.
• Process Reengineering:?In this phase, actual reengineering begins. A number of brain storming sessions are held with project team and other stakeholders, where current business processes are critically analysed to determine non value adding activities and identify excess control and check, always with customer value as a focal point. Impact of new technologies on process improvement is also evaluated. New process ideas with reduced check and control and enabling technologies such as Workflow automation and ERP, are envisaged. Benchmarking is also done with best of breed industrial peers.
• Blueprint of new system:?Blueprinting involves modeling workflow and information requirement, of new business processes. “To be” processes are modeled using various modeling tools. New organisation structures, human resource need, performance monitoring and compensation, technological needs, are also outlined. Normally, a first cut redesign scheme is produced which is modified after gathering actionable feedback from the stakeholders.
• Transformation:?A migration strategy and a migration plan is the first step of transformation. Migration strategy may decided as a pilot, phased or big bang implementation. The migration plan would include establishment of new organisational structure, detailed training and reallocation of workforce, and cut off dates for implementation. Change management and introduction of new technologies will form an important part and may need engagement of outside consultants for this specific purpose. There should be provision on the plan to tweak the implemented system so as to get maximum value out of it.

In the early stages of an ERP project, it is not unusual for managers to want to be closely involved so that they can articulate their department's requirements and ensure that the new system meets their needs. In all but the smallest projects, they soon find that doing their regular jobs whilst freeing up enough time to do this effectively is just not possible, so they frequently decide to delegate much of the task to subordinates. Unfortunately, what can happen then is that they delegate responsibility but not authority and then attempt to micro-manage those staff. They demand that all decisions are routed through them, and they demand a right of veto over any decisions made in their absence. The results are never good.

ERP product must make sure that we understand different industry problems. The ability to engage with clients, gather intel on the business process, evaluate, develop, test and deploy. The devil is always in the details and it is extremely important that the team understands the industry nature.?

Top 10 key ERP selection criteria:

1. Business Requirements
2. Upper Management Support
3. User Support
4. Functional Requirements
5. Integration with existing system
6. Cross Platform Integration?
7. Budget and Resources
8. Technology and future scalability?
9. Total Cost of ownership

ERP systems are very large and complex and warrant a careful planning and execution of their implementation. They are not mere software systems; they affect how a business conducts itself. How a company implements an ERP system determines whether it creates a competitive advantage or becomes a corporate headache. The top contributor for a successful ERP implementation is strong commitment from upper management, as an implementation involves significant alterations to existing business practices as well as an outlay of huge capital investments. The other important factors are the issues related to reengineering the business processes and integrating the other business applications to the ERP backbone. Upper management plays a key role in managing the change an ERP brings into an organisation. Thus it's important that the implementation phase has maximum engagements with upper management which best serves the core purpose of what an ERP should do for the business process.